ABSTRACT
This chapter looks at the case of security analysts, who face uncertainty and ambiguity in making their earnings forecasts and stock recommendations. It proposes that because they are concerned about how they are evaluated by others within the investment community, security analysts are likely to imitate their high-status peers – those certified by Institutional Investor's All-America Research Team. The chapter finds that the recommendations issued by All-American analysts lead to subsequent changes in the stock recommendations issued by other analysts, and that this effect is moderated by the analyst's firm-specific experience. It provides insight into the role of status in imitative behavior at the individual level and suggests that distinctions between individuals based on perceived prestige influence decision making under uncertainty. The chapter seeks to address the gap in our understanding of imitation by focusing on one particular subjective attribute, a manager's status, and the role it plays in imitation, since "status issues permeate social and organizational life".
